Hotels Report Occupancy Gains; Struggle With Room Rates

Wednesday, 01 August 2012 08:25
News Editor

According to preliminary statistics released by the Bahamas Hotel Association and The Bahamas Ministry of Tourism, the 14-major New Providence hotels recorded a 77.7% occupancy rate for June 2012 compared to 68.7% in June 2011. Room revenue increased by 8.3% on the strength of a 12.6% increase in room nights sold. However, the June 2012 Average Daily Rate (ADR) was $228.04 compared to $237.05 in June 2011.

The overall results vary by property. Five properties altogether lost room revenue (- 9.4%) generated by a 1.8% decrease in room nights sold and a $14.04 decrease in ADR. Five properties added to room revenue (+19.7%) based on a 17.7% increase in room nights sold with virtual $3.50 increase in ADR. Four properties added to room revenue (+6%) coming from a 13.4% increase in room nights sold and a $15.89 decrease in ADR.

“Our marketing efforts are paying off. These results, while generally encouraging, continue to point to challenges our industry faces. While we have seen occupancy rates increase in each of the past 10 months, our ADR has also declined in 7 out of the past 10 months. To remain competitive we are offering lower rates and investing heavily in marketing and value-added packages. The increased room night volume factor is under pressure from reduced average rates, increasing operating costs, and slowdown in group business; we remain cautious” according to BHA President Stuart Bowe.

The Ministry of Tourism and the Nassau Paradise Island Promotion Board continue to offer travel credits as part of a highly successful promotion campaign.

Looking ahead, President Bowe expressed caution. “The next four months could be very challenging for the industry. The traditional lull in activity during the soft months could deepen as we see growing uncertainty about the global economy and consumers in our major market, the United States, become preoccupied with the upcoming US election when historically they travel less. We are focusing on marketing efforts and supporting events to inject business during the period”.

The Second Quarter showed a 75.4% occupancy rate compared to 67.9% last year. The ADR was $237.23 compared to $251.62 in 2011. Room nights sold was up 11.1%, while ADR decreased by $14.39. Year to date to the end of June, 2012 showed a 73.3% occupancy rate compared to 67.2% last year. The ADR was $246.96 compared to $252.16 with the room nights sold up 9.6% and room revenue up 7%.

The June and year-to-date results also show a similar pattern to pre-recession performance, with the major hotels beating 2008 occupancy results but lagging behind in average daily room rates.

Comparative figures for June 2008 showed a 71.9% occupancy and a $235.77 ADR. Comparative figures for the Second Quarter 2008 showed a 71.1% occupancy and a $253.66 ADR. Comparative figures to the end of June 2008 showed a 72.4% occupancy and a $268.02 ADR.